Let me introduce some of the analysts who worked on the reports; they will be available to answer your questions after the briefing: Charles Nelson (Assistant Division Chief), Mary Naifeh (Acting Chief of the Poverty and Health Statistics Branch), Edward Welniak (Chief of the Income Statistics Branch), and the primary authors of the reports, Robert Cleveland, Joe Dalaker, Carmen DeNavas-Walt, and Arthur Jones. I'd also like to thank all the Field Representatives who work so hard to collect these data.

Please hold your questions unless it's a technical clarification. The main presentation should take about 20 minutes.

Let me first summarize the main findings. Increases in income and declines in poverty were widespread in 1997 [GIF - 18k]. For the third consecutive year, households in the United States experienced an annual increase in their real median income. Between 1996 and 1997, median household income adjusted for inflation increased 1.9 percent, to $37,005 (that means that half of households had incomes above $37,005). In addition, the poverty rate fell from 13.7 percent in 1996 to 13.3 percent in 1997. Despite this increase in income, however, the number of poor remained statistically unchanged -- the number of poor in 1997 was 35.6 million people. In statistical terms, both median income and the poverty rate have returned to their 1989 levels. Finally, there was no change in income inequality from 1996 to 1997.

Data from the March Supplement to the Current Population Survey or CPS are the basis for these statistics. The CPS is a sample survey of approximately 50,000 households nationwide, conducted each month for the Bureau of Labor Statistics. These data reflect 1997 and not current conditions.

As in all surveys, the data in these reports are estimates, subject to sampling variability and response errors. All statements made in the reports and in this briefing have been tested statistically. All historical income data are expressed in 1997 dollars and were adjusted using the Consumer Price Index; inflation was 2.3 percent between 1996 and 1997. The poverty thresholds are updated each year for inflation as well; for a family of four in 1997 the threshold was $16,400, for a family of three, $12,802.

Per capita income showed an increase between 1996 and 1997 only for Whites among the race groups, and also for Hispanics.

As this next chart shows, there was a different pattern for poverty by race and ethnicity than for income [GIF - 24k]. Blacks experienced a decline in their poverty rate by 2.0 percentage points, down to 26.5 percent. Similarly, Hispanics experienced a decline in their poverty rate by 2.3 percentage points, down to 27.1 percent, which was not statistically different from the rate for Blacks. Compared to the overall poverty rate of 13.3 percent, both poverty levels remain high. Nevertheless, as this pie chart shows, more than two-thirds of all poor are White and 46 percent of all poor are non-Hispanic Whites.

It is clear that the economic recovery to 1989 levels is quite widespread. The most notable group whose recovery seems to have been delayed is households and individuals in the Northeast. They however had the largest increase in median household income in the 1980s of any region.

This is the fourth consecutive year in which there was no year-to-year change in overall income inequality -- there was no statistically significant change in quintile income shares between 1996 and 1997 nor did the Gini index of inequality show a change between 1996 and 1997.

The Census Bureau also produces a series of experimental estimates of income, in an attempt to gauge the effect on income and poverty of noncash benefits and taxes, which are not considered in the official measures. Seventeen experimental definitions of income are computed, and tables based on those results are presented in the reports.

The Bureau's research in this area has shown that the distribution of income is more equal under a broadened definition that takes into account the effects of taxes and noncash benefits than under the official cash income definition. Government benefits play a much more equalizing role on income than do taxes.

Valuing noncash benefits and subtracting taxes also affects the estimated poverty rate [GIF - 21k]. Under the broadened definition of income, the estimated poverty rate was 10.0 percent or 26.9 million people, compared to 13.3 percent and 35.6 million people under the official income definition. Regardless of the method chosen to measure income, as you can see in this chart, the pattern of change in poverty over time is similar.

Census Bureau and the Bureau of Labor Statistics researchers are examining the recommendations of a recent National Academy of Sciences panel for changing the official poverty definition. We expect to release a special report on the effects of these recommendations on poverty measures this Spring. You can follow our progress on a special "Poverty Measurement" web site

In the past, we have usually released information on health insurance coverage at this press conference as well. That information is available in a press release to be sent this afternoon under embargo until next Tuesday.

Let me call to your attention that this is the fiftieth anniversary of income data from the Current Population Survey [GIF - 23k]. The Census Bureau will release a special report at a press conference next Tuesday to mark the occasion. We have invited a panel of four distinguished economic experts to comment on the usefulness of these data for understanding our economy and society. The panelists are Katharine Abraham, Commissioner of the Bureau of Labor Statistics; Alan Blinder, Professor of Economics at Princeton University; Marvin Kosters, Resident Scholar at the American Enterprise Institute; and Charles Schultze, Senior Fellow Emeritus at the Brookings Institution.

Let me again summarize the main findings. For the third consecutive year, households in the United States experienced an annual increase in their real median income. Between 1996 and 1997, median household income adjusted for inflation increased 1.9 percent, to $37,005. In addition, the poverty rate fell from 13.7 percent in 1996 to 13.3 percent in 1997. Despite this increase in income, however, the number of poor remained statistically unchanged -- the number of poor in 1997 was 35.6 million people. Finally, there was no change in income inequality from 1996 to 1997.

I'll be glad to answer questions from the press at this time. Please identify yourself and your affiliation.

Footnotes:

The difference rounds to 0.5 even though the difference in the rounded percentages for the two years is only 0.4.

The differences among the 1996-1997 percent changes in median household income for the race and Hispanic origin groups were not statistically significant.

The difference between the percent increases in the earnings of men and women was not statistically significant.